NAB Morning Call

Thursday 7th April 2022Bond markets have reacted sharply and briefly to the FOMC minutes this morning, which suggested the Fed might start slashing its balance sheet sooner rather than later. This added to the sentiment expressed by Lael Brainard earlier in the week, which saw the yield curve steepening a little. Phil Dobbie asks NAB’s Gavin Friend what these moves are telling us, and why the impa...

Wednesday 6th April 2022The RBA has lost its patience and wants to move fast, but how fast and how far? On today’s podcast NAB’s Ivan Colhoun says it’s unlikely we’ll reach the 3% terminal rate that markets are anticipating, or at least with the expected rapidity. Taylor Nugent – new to the Morning Call – looks at the market response to words from the Fed’s Lael Brainard overnight, who talked abou...

Tuesday 5th April 2022The hope of peace in Ukraine is slipping away as more evidence of war crimes emerges, suggesting diplomacy could take some time. The Euro fell as expectations rose for more sanctions against Russia, which also pushed oil higher. NAB’s Tapas Strickland says negotiations are continuing though and we shouldn’t underestimate the chance for some sort of truce to be found. Meanwhil...

Monday 4th April 2022Non-farm payrolls gave the hawks at the Fed the ammunition they wanted, and bond yields have responded. NAB’s Rodrigo Catril says the data on Friday has cemented in the expectation of a 50bp rate hike at their next meeting. The ECB is still reticent to talk about bringing their schedule forward, even though Friday’s Eurozone inflation numbers were a lot higher than expectation...

Friday 1st April 2022There’s a hefty emphasis on oil and gas this morning. Putin is demanding payment in Roubles from today, but there seems to be some caveats and so the impact isn’t as pronounced as you might expect. More significantly, President Biden has announced a six-month commitment to a daily draw down from the US strategic oil reserves. Will it be enough to make a difference? NAB’s Ken C...

Thursday 31st March 2022There was hope in market pricing earlier in the week that some sort of resolution over Ukraine could be sought soon. But those hopes faded when Russia started bombing regions it had indicated it would pull back from. Today, oil prices are back up and US equities have been hit hard. It’s not all down to Ukraine though. Inflation rates in Germany and Spain are through the roo...

Wednesday 30th March 2022Markets have responded perhaps a little too favourably to peace negotiations between Russia and Ukraine in Turkey overnight. There wasn’t a concrete outcome, yet the Euro is riding high, stocks have risen sharply and bund yields are up. NAB’s Ray Attrill says even if some sort of resolution is found soon, sanctions will remain for some time to come. Meanwhile, front end yi...

Tuesday 29th March 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9There’s continued volatility in US bond markets, with significant flattening of the yield curves. Is this flagging a future recession? NAB’s Rodrigo Catril says the direction of travel is looking that way, although it’s too early to tell. But the rise in 2-year yields sho...

Monday 28th March 2022The sell-off of bonds continues, with a further spike in yields at the end of last week. NAB’s Tapas Strickland says it’s because there is heightened expectations that the Fed will lift rates even faster than previously thought, possibly even four 50 basis point rises this year. Yet the share market – in the US and Europe – continues to rise. We look at why in this morning’s...

Friday 25th March 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9It's a very mixed and confusing day today. “It’s rare that you see equities and bond yields rise at the same time”, says NAB’s David de Garis, but maybe markets have optimism that the Fed’s aggressive stance will put the inflation genie back in its bottle. Or investors are...

Thursday 24th March 2022Bond yields have come back a fair bit today. NAB’s Gavin Friend says it’s just a recalibration after the massive hikes we’ve seen over recent days. The tone from the FOMC certainly hasn’t changed. Meanwhile oil prices have risen sharply, in part because President Putin has threatened that Europe should pay for gas in Rubles, rather than dollars or Euros. If it’s an attempt...

Wednesday 23rd March 2022Just three weeks into March and US two-year bond yields are up 74 basis points, says NAB’s Tapas Strickland, on today’s Morning Call. Will the Fed be happy to see the market responding in this way, particularly as there’s less growth later in the yield curve? Does that suggest there are some concerns about whether Fed can keep inflation in check, without causing a recessio...

Tuesday 22nd March 2022Bond yields have moved sharply higher as markets expect the Fed to move faster on rate rises and, potentially, drawdowns on the balance sheet. After Jerome Powell spoke overnight, NAB’s Ray Attrill says there’s now a much stronger expectation that April’s meeting will see a 50 basis point rate hike and, perhaps, the same again at the next meeting. Could the ECB also be stepp...

Monday 21st March 2022Nobody really knows how the war in Ukraine will play out, but we kick off the week with reports from Turkey that an understanding between Ukraine and Russia might be closer. There’s even speculation that the two leaders will meet face to face – obviously at opposite ends of a very long table. On today’s Morning Call Phil Dobbie talks to NAB’s Ray Attrill about the market opti...

Friday 18th March 2022After a very hawkish Fed yesterday, the Bank of England has presented a much more guarded approach for the rest of the year, whilst delivering the third interest rate in a row. NAB’s Gavin Friend talks about why the central bank has a reluctance to signal too much right now. Meanwhile, are markets concerned that the Fed is moving too fast? There’s discussion about Aussie unem...

Thursday 17th March 2022The Fed has met, they’ve lifted rates in the US, and given a hawkish outlook for rate increases this year and next, with a terminal rate of 2.8 percent by the end of next year. The statement and subsequent press conference left some questions unanswered. NAB’s David de Garis points out how they plan to get inflation under control without unemployment rising, even by the end...

Wednesday 16th March 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9Chinese equities have been hit hard again today, despite data showing very strong retail sales, industrial production and fixed asset investment. NAB’s Ray Attrill says it’s a mix of increasing COVID cases, causing more lockdowns, and China’s position over the Ukraine w...

Tuesday 15th March 2022China and the US have been meeting, with the hope that talks can resolve the war in Ukraine. But China is showing little sign of offering total support for the west. NAB’s Tapas Strickland wonders whether they’ll need to, with talks between Russia and Ukraine at least offering the opportunity “for an off-ramp” from the conflict. Oil prices have fallen today, mainly because o...

Monday 14th March 2022Fighting got very close to the Polish border over the weekend, with Russian attacks on a training base. NAB’s Rodrigo Catril says it’s hard to see the volatility across all asset classes calming down as the uncertainty in Ukraine remains. Although talks are ongoing there has been little grounds for hope so far. This makes it all very tricky for the FOMC, whose members will be...

Friday 11th March 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9The war isn’t going to end anytime soon. That was clear with the high-level peace talks on Turkey breaking down after just 90 minutes, acting as nothing more than a conduit for untruths. That’s partly why we’ve seen a shift back in sentiment. The risk-on mood yesterday was...

Thursday 10th March 2021Looking at the markets this morning you might be mistaken for thinking Vladmir Putin had resigned, but sadly not. The war is still on, and just as messy as ever, but equities have risen, oil is down and bond yields are rising. NAB’s Gavin Friend talks us through this broad reversal in risk sentiment, which he says is being driven by a number of factors, but nothing concrete...

Wednesday 9th March 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9Markets have been encouraged by a possible solution to the Ukraine crisis. The Kremlin had suggested a raft of measures, including a ban on NATO membership. Today, Ukraine’s President Zelenskyy suggested NATO wasn’t a priority. NAB’s Rodrigo Catril says the hope that a p...

Tuesday 8th March 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9Day 12 of the war in the Ukraine brought more violence and uncertainty. Russia’s offer of a temporary ceasefire so residents could escape was given short shrift when it was clear the escape route was to Russia or Belarus. It was a strong risk-off session across all asset c...

Monday 7th March 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9For a while over the weekend it seemed like Vladimir Putin was suggesting the west had already declared war with it imposition of sanctions, but, in context, he was really saying it was like a declaration of war, but a no fly zone would be a declaration of war. Whilst that’...

Friday4th March 2022The Aussie dollar was one of the winners today, even as the US dollar lurches to highs not seen since the early days of pandemic. It’s been driven by demand for coal and iron ore, as almost all commodities respond to the shock of supply cuts from Russia and Ukraine. Jerome Powell was back on Capitol Hill today, again reiterating the need to control rising inflation. Jobs contin...